Commodities Will Rule And Stocks Drool In 2019

Jerry Welch, Commodity Insite!
Call me at 406 -682 -5010
Ennis, Montana 59729

Below is my first newspaper column for 2019. Hope you find something of interest in my ramblings.


January 4, 2019

Commodities Will Rule and Stocks Drool in 2019

The first column I posted in 2018 was entitled, Bubble of Historic Proportions regarding the bond market and the bearish impact higher interest rates could have on the Big Four: stocks, bonds, currencies and commodities in the New Year. As it turned out, higher interest rates in 2018 were indeed one of the primary reasons stocks and commodities did so poorly.

As the Fed kept ratcheting rates upward, commodities per se as measured by the CRB Index peaked in mid-June and stocks as measured by the Dow Jones topped out in early October. In the final week of the year, both the CRB Index and the Dow Jones slumped to a 20 month low and did so on the same day!

Rising interest rates, a trade war with China amid Trump tariffs and concern that global and US economic growth was slowing were the primary reasons stocks and commodities were slapped so hard in the year that just ended. But here is the rub. According to in 2018, there was nowhere to hide as asset classes across the board came under pressure. Simply put, in 2018, if you long, you were wrong!

Here are equally unsettling facts about the year that just ended. The Bloomberg Commodity Index, which measures the return on 22 raw commodity futures fell 12 percent in 2018. It was the seventh annual fall in 11 years. And though the Dow and S&P fell about 6% in 2018 commodities per se did twice as bad.

But as you well know, I dubbed 2018, as,

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